Onion prices shoot up after India,Bangladesh place import orders

KARACHI: Pakistan is poised to fetch higher export orders for onion this year after India, its competitor, and Bangladesh returned to the international markets to overcome local shortage in supplies, traders have said.

"Pakistan has registered an increase in demand from the overseas markets in the last couple of weeks…India has recently started importing onion from Pakistan via the Wagah border," said Haji Shahjahan, an exporter.

"Total export of the country would remain steady at 450,000 to 500,000 ton this year, which is similar to the previous year," he estimated. The country’s annual export size of the commodity stood at 250,000 to 300,000 tons in recent years, he added.

Shahjahan said that on an average, some five trucks of onions have been crossing the Wagah border daily to enter into India from Pakistan. Each truck carries some 15 tons of onions.

Under these circumstances, prices at Karachi's wholesale market at Super Highway have shot to Rs1,600/40kg of onions from Rs1,000-1,100/40kg a few days ago. Accordingly, the commodity in retail has increased to around Rs40-50/kg from Rs30-40/kg a few days ago.

He linked the hike in the prices with the drop in supplies to the market. "Supplies are sometimes slowed down when the crop finishes in one area and harvesting begins in other areas...These days, onions from Balochistan are available in the markets nationwide." Sindh would begin harvesting the new crop from October, and will continue in full swing until November-December. The crop would last till April 2016.

He, however, said Malaysia, Sri Lanka, and UAE remain the biggest importers of Pakistani onion.

Attributing the price fluctuation to the demand supply gap, Shahjahan said Malaysia has been importing 50-60 containers (of 25 tons each) every week, UAE 40-50 containers, whereas Sri Lanka buys 30-40 containers of onion from Pakistan every week. "On a weekly average, Pakistan exports 8,000 to 10,000 tons of onion," he said.

Ahmed Ali Baloch, another exporter, said "I have just received an export order from Bangladesh, and I am evaluating the export price."

Reportedly, Bangladesh usually imports onion from India. The export country {India}, however, is itself experiencing shortage in local supplies and price-hike these days. The situation has also convinced Bangladesh to divert its import orders to other countries.

Pakistan, a common neighbour to both the countries, with a local production estimated at 2.5 million tons this year, may help them overcome a part of their local shortages.

Egypt, Iran, an Afghanistan may also help them overcome the crises, it was learnt.

Baloch added that Pakistan could fetch higher exports than the estimated amount if the government did not set a maximum limit per exporter. "According to the rules, one exporter cannot load more than one container of onion in each vessel… may be each vessel carries 100 containers."

Shahjahan added two to three vessels of onions leave the Karachi Port every week.